Food and beverage industry hails Indonesia-US trade negotiations as boost for flagship products' competitiveness
Jakarta (ANTARA) - The Indonesian Food and Beverage Producers Association (GAPMMI) has assessed that the Indonesian government’s trade negotiations with the United States play a vital role in strengthening the competitiveness of flagship national products whilst safeguarding the sustainability of the food and beverage industry.
GAPMMI considers that the negotiations provide market certainty and a conducive business climate, which are key factors for industry sustainability.
“For the food and beverage sector, such certainty is also highly dependent on the availability and sustainability of industrial raw material supplies, particularly for certain raw materials that are not yet fully available or cannot be sourced domestically,” said GAPMMI chairman Adhi Lukman in a confirmed statement in Jakarta on Monday.
The organisation expressed its appreciation for the government’s efforts, led directly by President Prabowo Subianto, in maintaining business climate stability, enhancing competitiveness, and strengthening national industrial resilience through the trade negotiation process with the US.
According to GAPMMI, the government’s trade negotiations have the potential to open alternative sources of raw materials needed by industry. This is seen as supporting the continuity of downstream food industry production, safeguarding investment realisation, ensuring labour absorption along the food and beverage industry value chain, and helping to maintain public purchasing power.
Furthermore, the negotiation process is considered capable of reducing trade uncertainty and strengthening the position of Indonesia’s flagship products in the US market, such as cocoa, coffee, palm oil and their derivatives, which have received tariff exemptions.
“Market access certainty and more competitive tariffs provide space for industry players to improve cost efficiency, maintain production capacity utilisation, and strengthen export-oriented investment planning. For food and beverage industries integrated into global supply chains, this is a critical supporting factor in maintaining and expanding the penetration of Indonesian products in international markets,” Adhi added.
The National Economic Council (DEN) stated that the signing of a trade agreement between the Indonesian government and the United States could protect national interests amid rising international trade uncertainty.
DEN chairman Luhut Binsar Pandjaitan said the agreement represented a strategic step to ensure Indonesia’s position remains strong and credible whilst reinforcing national industrial competitiveness.
“This agreement ensures Indonesia’s position remains strong and credible amid global trade uncertainty. This is a strategic step to protect national interests whilst strengthening our economic competitiveness,” he said in Jakarta on Monday.
Previously, the US Supreme Court struck down the reciprocal trade tariff policy imposed by US President Donald Trump, ruling that the legal basis used — the International Emergency Economic Powers Act (IEEPA) — was invalid.
IEEPA is legislation signed by US President Jimmy Carter on 28 December 1977 that permits the president to regulate US international trade after declaring a national emergency in response to extraordinary threats originating from abroad.
President Trump responded to the annulment of the reciprocal tariff policy by imposing a new 15 per cent tariff for the next 150 days, whilst simultaneously opening new trade investigations under Section 301 of the US Trade Act of 1974.
Luhut stated that tariffs resulting from the Section 301 investigation could be higher than the reciprocal tariffs that were just struck down, as the regulation has no maximum tariff ceiling and can remain in effect for years.